| answer text |
<p>The prudential capital finance system gives authorities wide local discretion on
how to invest their surplus funds.</p><p>When setting their investments strategy,
local authorities are required to have regard to Local Government Investments Guidance
published by my Department. This guidance states that a prudent investment policy
will prioritise Security (protecting the sum invested from loss), Liquidity (making
sure the funds invested are readily available when needed) and Yield (maximising the
return) in that order.</p><p>When having regard to this Guidance we would expect local
authorities to ensure that they remain aware of all relevant information, including
the recent Bank of England advice. We have no plans to provide specific additional
guidance to local authorities in this area.</p>
|
 |
